This study concerns the development of a measure of educational need and its use in a State school support formula in New York. The study assumes that public schools should operate positively to further equality of opportunity and that schools are able to affect achievement levels and rates of learning. The present State-aid formula is not sufficient because it recognizes differences in fiscal need but not in educational need. Noting that educational costs for children with special needs are relatively high compared with costs for normal children, the present formula discriminates against districts having a high proportion of special problem students. The research in this study, based on a sample of 45 school districts, suggests using the following variables: (1) The ratio of Negro and Puerto Rican students in the school, (2) the percentage of children from broken homes, (3) the average number of different schools the students have attended in the past 3 years, and (4) the average number of years of schooling the parents have completed. These measures predict 71% of the variation in educational achievement in both reading and arithmetic and, therefore, can establish educational need consistent with the stated assumptions. [Table XI on page 66 may reproduce poorly due to small print.] (LN)